Sustaining the US-India momentum on clean energy

Post Modi's visit to the US, the bilateral relationship is taking a new strategic course with energy partnerships setting the new roadmap for future collaborations.

US-India relations have taken a new turn after the visit of Prime Minister Narendra Modi. His engaging discussions with President Barack Obama, including a joint statement, have set in motion a chain of activities that will strengthen the bilateral relationship. Modi's interaction with the Indian knowledge community in the US, including his speech to over 20,000 people at the Madison Square Garden, has reinforced India's commitment towards greater cooperation with the US. During Modi's visit, Dr Ernest Moniz, United States Secretary of Energy, speaking at the 5th US-India Energy Partnership Summit, said, "the enhanced strategic partnership" announced by President Barack Obama and Prime Minister Narendra Modi marks a major development in the collaboration between the two countries in energy and sustainable development. "Our partnership is robust, reliable, enduring and expanding. We can together build a clean sustainable future that President Obama and Prime Minister Modi are committed to," Moniz said.

The deliberations at the two-day Summit - which was organized by The Energy and Resources Institute (TERI) North America and Yale University in Washington DC from September 30 to October 1, - echoed the agenda announced by Modi and Obama. The response of the US government became even more clear when Dr Moniz listed four key areas "we have a strong base to build on", namely, new US/India Smart Cities collaborations, new multi-billion dollar effort to support renewable energy, US/India partnership for climate resilience and training students and scholars in US/India exchange program. Dr Moniz said Mr Modi "is providing a new momentum". In the area of finding low-carbon energy solutions for India's ambitious plans, Dr Moniz said nuclear energy is an area where we need to step up collaboration.

Dr R K Pachauri, President, TERI North America and Director General, TERI, said, "For the first time there is optimism and an upbeat attitude towards renewable energy in India." He spoke of prospects of a breakthrough. He said that the Summit discussions had developed several ideas to help implement the goals of the "new and enhanced strategic partnership on energy security, clean energy, and climate change" announced by the leaders of the US and India.

Charting the discourse

In the first concrete action since the US and Indian leaders announced plans to boost cooperation in energy fields, TERI and United Technologies Corp. signed a Memorandum of Understanding to set up the Center of Excellence on Energy Efficient Buildings in India's Cities. The United Technologies -TERI Center of Excellence will be set-up at and administered by TERI and will focus on ways to evaluate and enhance energy efficiency in existing buildings in India. Dr J Michael McQuade, UTC Senior Vice President of Science and Technology, said, "With India's expected urban expansion over the next 20 years, it is imperative that we make India's existing and future buildings more energy efficient. UTC's contribution to create this new Center of Excellence is a major step forward in supporting that mission."

Bruce Andrews, United States Deputy Secretary of Commerce, said an important challenge was how to make it easier for US companies that wish to be a part of the Indian market. "Infrastructure collaboration plan is something they are very excited about, and for this to be successful we need to look at the business climate." He added, "We're excited and encouraged by Prime Minister Modi's goal. American companies are very excited about the Indian market."

Jonathan Elkind, Assistant Secretary for International Affairs (Acting), US Department of Energy, said in times to come cities will become more hungry for energy and more difficult to manage. "How can one simply germinate good practices in isolated countries as well as provide good opportunities for investors to create favourable returns?" Ms Leocadia Zak, Director, US Trade and Development Agency (USTDA), emphasized the role of the private sector. "To be able to accomplish our goals, it's not just about governments, it's about the private sector, it's about the people," she said. She cited a program involving the setting up of a roadmap for Tata Energy to reduce electric grid transmission losses which has and seen tremendous results.

Responding to the emerging challenges, Naina Lal Kidwai, Chairman of HSBC India, said: "A clean energy revolution shows opportunities for those who are prepared to lead." She provided an outline that emphasized the need for financing the tremendous challenges. "Here's where the US and India can work together: What are the ideas, what are the innovations in financing, what are the ways India can close the gap on access to finance? How can India better access some of the green climate funds? How can India access the BRIC Bank? What is it we need in terms of credit enhancement and access to money?" she said. Dr Pachauri added that India should follow the best practices from US, not emulate.

'Move the capital'

"There are huge environmental risks by not building environmentally, or in a way to mitigate climate change. We have every reason to act together," said US Deputy Secretary of Energy, Daniel Poneman. Speaking at the luncheon address at the Summit's High Level Corporate Dialogue, he said, "But given the scale of the challenge," he said, "Government cannot do it all." Therefore, he said there was need for involving the private sector. "Capital markets move more money in a day that governments move in a year," he added.

The government, Poneman said, "could be a first purchaser, and could set of the rules of the game and liberate private capital to scale up programs". He added "the Department of Energy would invest early, well before it is reasonable for the private markets to invest". Areas where the government can give an initial boost is in the stage of projects that are in "the valley of death," a phase when they fail without adequate help. These are when a new idea is first being prototyped, and when an idea is beginning to be implemented, but has not yet been deployed to scale."

Speaking on nuclear plants, Poneman said, "Both India and the US have invested a lot of political capital into creating more nuclear power plants. Hopefully some of the remaining issues will be addressed in the course of the deliberations." "Nuclear still has a role to play in a low-carbon energy future," he added.

"I've never seen a time where our relationship has so much potential...to create a new energy revolution which will drive manufacturing, and other issues," he said. "We need to create more of a familiarity with green assets in order to build a more robust capital market in this area."

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